PFN - JQC: The Fund's Current Portfolio Positioning Appears Concerning

2024-07-30 11:36:07 ET

Summary

• Nuveen Credit Strategies Income Fund offers a high level of current income with an attractive 11.47% yield.
• The fund invests in senior loans, high-yield corporate debt, and collateralized loan obligation debt, with a focus on floating-rate securities.
• The fund increased its floating-rate assets during the three-month period through April, which is the wrong approach if interest rates are cut.
• It is uncertain whether the fund has begun migrating its portfolio to favor fixed-rate debt, and we will not know this until after the September FOMC meeting.
• The current valuation is okay, but it is probably best to hold off on buying shares since rate cuts would hurt this fund.

The Nuveen Credit Strategies Income Fund ( JQC ) is a closed-end fund, or CEF, that income-focused investors can purchase as a method of achieving their goal of earning a high level of current income from the assets in their portfolios. The fund does fairly well in this respect, as it boasts a very attractive 11.47% yield at the current price. This yield compares quite well with most other funds that employ a similar strategy. This is shown here:

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